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Professors address morality of capitalism

| Monday, November 20, 2017

Professors ventured to answer the question “Is capitalism moral?” through a discussion of various economic systems Friday at Jenkins and Nanovic Halls.

James Otteson, professor of economics at Wake Forest University, said addressing social issues related to economics is a productive approach.

“ … Two social issues that almost everyone who endorses a humane and just society tend to focus on are poverty and inequality,” Otteson said. “But let me ask you? Which is more important? If you can solve one of them, but only one, which one would you solve? … Many people think these two are linked. If you solve one, you solve the other, but alas, that doesn’t seem to be the truth.”

Citing the research of Stanford historian Walter Scheidel, Otteson said material equality is produced by four things: mass warfare, revolution, state collapse and plague. Prosperity, on the other hand, comes about by a society that protects a person’s physical safety, possessions and right to trade.

“It turns out that the same political, economic and cultural institutions that enable the greatest [increase in wealth] also allow inequality,” he said. “There’s the rub. Substantially, everyone gains but they don’t gain at the same rate.”

Associate professor of constitutional studies at Notre Dame, Patrick Deneen, said this “market ideology” views economic systems and political systems as separate entities. In its most extreme forms, he said, this ideology views political entities as subordinate to the demands of the free market. This view is radically different from the classical conception of the market, Deneen said.

“By contrast, if you go back to Aristotle, markets are embedded within the polities,” he said. “They’re the marketplaces, the agora. They’re governed by the city’s expectations that its activities are ordered to the public good and then even more oriented towards the common good.”

With the decline of these forms of economic systems, Deneen said, market ideology has led to inequality and entered other areas of life beyond the economic sphere.

“Market forms of behavior and thinking are likely to arise in areas where they shouldn’t predominate —  areas such as such as the family, sexuality, education and religion,” he said. “Today, we lack a really good free market where we need one, and we have very bad free markets where they shouldn’t exist.”

Still, Otteson said, it is better to solve the problem of poverty and allow material inequality to exist.

“The fact that the political and economic institutions that enable some to have more than others — even much more than others — are the same institutions that enable growing overall prosperity and peace seems then to confront us with this stark choice: We can have prosperity and a reduction in — and perhaps even an elimination of — poverty, or we can have equality, but also poverty, violence and death,” he said. “For me, the choice is clear.”

While this form of economy allows material inequality, it creates an “equality of moral agency,” Otteson said.

“The kind of system I’m talking about is the one of moral agency and historically that leads to unprecedented levels of wealth,” he said. “Adam Smith called it ‘the obvious and simple system of natural liberty.’ So a system that proposes both prosperity and morality I think, is one worth defending, regardless of what you call it.”

In response, Deneen said differentiating between the “moral market system” Otteson proposed and capitalist ideology is impossible.

“I take it that the Catholic Social Teaching rejects market ideology, and I think [Otteson] suggests this as well, but too often this market is infused by market ideologues to advance this position, particularly the fundamentalist belief that any state intervention in the marketplace — or nearly any state intervention in the marketplace — is unjustified, as well as an intrusion on the autonomous realm of economic activity,” Deneen said.

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